Swedish Automobile N.V. (Swan) has announced that Saab Automobile AB and its subsidiaries Saab Automobile Powertrain AB and Saab Automobile Tools AB (collectively Saab Automobile) filed for voluntary reorganization with the District Court in Vänersborg, Sweden.

In an issued statement, Swan and Saab Automobile are considering Saab Automobile’s current limited financial resources, “a voluntary reorganization will entail the best preconditions for using existing resources in the most efficient way.”

Victor Muller, CEO of Swan and CEO and Chairman of Saab Automobile, and the Saab Automobile management team vowed to cooperate closely with the administrator to execute the reorganization plan.

" We have concluded that a voluntary reorganization process will provide us with the necessary time, protection and stabilization of the business, allowing salary payments to be made, short-term funding to be obtained and an orderly restart of production to be prepared," Muller said.

"While the voluntary reorganization process will no doubt present us with a number of tough issues and decisions, I believe that Saab Automobile will emerge stronger from this process,” he said.

The voluntary reorganization process will cover Saab Automobile AB, Saab Automobile Powertrain AB and Saab Tools AB.

All other entities, including Saab Parts AB and all overseas entities such as Saab Great Britain and Saab Cars North America, are excluded from the reorganization.

“The eventual purpose of the proposed voluntary reorganization process is to secure short-term stability while simultaneously attracting additional funding, pending the inflow of the equity contributions of Pang Da and Youngman,” it said.

The statement said that under Swedish law, an independent administrator appointed by the court will work closely with the Saab Automobile management team.

“As part of the process, Saab Automobile has formulated a reorganization plan, which includes a number of aspects aimed at lowering its cost-base and creating a viable, competitive and independent organization,” it said.

The reorganization plan will be presented to creditors within three weeks of the filing, although this period could be extended by the court.

Following court approval, the voluntary reorganization will be executed over an initial period of three months. The reorganization period can be extended by another three months, up to a maximum of 12 months, if required by the court.

“Swan and Saab Automobile are confident that they will secure additional short-term funding for the reorganization period and are currently in negotiations with several parties about obtaining such funding,” it said.

It added that gunding for Saab Automobile to exit its reorganization has been secured through binding agreements with Pang Da and Youngman as announced on July 4 but are still subject to obtaining certain approvals.

It said the court-appointed administrator will apply for the Swedish state’s wage guarantee scheme to allow wage payments to all Saab Automobile employees to be made.

August salaries are expected to be paid within a short time frame following the court approval.

Saab Mobile is also seeking support of its creditors as regards its outstanding debts.

Saab Automobile has proposed that the District Court appoints Swedish lawyer Guy Lofalk as administrator, who also was the administrator in the successful 2009 Saab
Automobile reorganization.

“The potential for Saab Automobile as a viable, independent premium car manufacturer is there, as shown by the rejuvenation of our product portfolio, approximately 11,000 orders and the conditional long-term funding already in place through the binding agreements with Pang Da and Youngman that will give us access to the Chinese market," Muller said.